Taxpayer Advocate Service Needs to Make Fixes

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The Taxpayer Advocate Service is falling behind in implementing several recommended changes in its processes, according to a new report from the Treasury Inspector General for Tax Administration.

The report follows up on earlier recommendations by the Inspector General. Of the 20 corrective actions reviewed by TIGTA, seven had been completed as reported by the Taxpayer Advocate Service. However, the TAS has not finished seven corrective actions that it had earlier reported were completed. It also did not have supporting information to substantiate that three corrective actions had been completed, and it completed three corrective actions after the reported completion date. 

For example, the TAS agreed to develop procedures to verify that licensed practitioners serving on the Taxpayer Advocacy Panel are in good standing with the IRS to help ensure that tax professionals making recommendations to the IRS have not been disbarred, suspended or censured. Despite reporting this action as complete, the TAS has not developed formal guidance to ensure that panel members are in good standing with the IRS, the report noted.

In another example, the TAS agreed to formalize guidance requiring its employees to consider a taxpayer’s financial circumstances when determining the best way to assist the taxpayer, but it did not update its interim guidance or issue formal guidance as agreed with TIGTA. The guidance would help TAS management improve taxpayer service based on circumstances such as expediting a refund to an unemployed taxpayer.

TIGTA recommended the IRS change the status of the incomplete corrective actions from closed to open, develop formal written policies requiring submission of verifiable supporting documentation to show a corrective action has been closed based on a management response to a TIGTA report, and provide more training to staff for approving and closing corrective actions.

In response to the report, National Taxpayer Advocate Nina Olson agreed with TIGTA’s recommendations. She noted that TIGTA’s recommendations, along with the procedural changes, will improve how the Taxpayer Advocate Service keeps track of the planned corrective actions it has committed to take in response to TIGTA’s recommendations.

“Over the years, TIGTA has reviewed various aspects of the Taxpayer Advocate Service (TAS) organization, making numerous recommendations,” Olson wrote. “While TAS has done a good job of addressing these recommendations by taking appropriate corrective actions, I acknowledge there is room for improvement in our processes.”

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